Advertisement
Advertisement

USD/JPY Weekly Fundamental Analysis, November 16 – November 20, 2015 Forecast

By:
James Hyerczyk
Published: Nov 14, 2015, 18:24 UTC

Weekly Analysis and Recommendations:  The USD/JPY drifted lower last week, driven by technically overbought conditions and a drop in U.S. equity markets.

USD/JPY Weekly Fundamental Analysis, November 16 – November 20, 2015 Forecast

USDJPY
Weekly Analysis and Recommendations:  The USD/JPY drifted lower last week, driven by technically overbought conditions and a drop in U.S. equity markets. The Forex pair closed down .5230, or -.42% at 122.6210.

The longer-term forecast is for a stronger U.S. Dollar versus the Japanese Yen. The catalyst behind this forecast is the outlook for higher U.S. interest rates, starting with the widely expected rate hike by the Fed in December.

Over the short-run, however, the USD/JPY may feel some pressure if investors continue to dump equities and if the Bank of Japan continues to take a wait-and-see attitude towards the economy rather than implementing fresh stimulus.

The first key report this week is Japan’s preliminary GDP. Quarter-to-quarter GDP is expected to decline 0.1%. Year-to-year GDP is expected to come in at 1.7%. A stronger-than-expected reading is likely to mean the BoJ will continue to keep its asset-purchase program at current levels. A lower-than-expected reading is likely to mean further stimulus at some point in the future.

This week, investors will get the opportunity to react to the latest U.S. consumer inflation data, too. Month-to-month core inflation is expected to rise 0.2%, or 1.9% annually. This will put it just under the Fed’s benchmark target of 2.0%. However, next month, the figure may rise to 2.0% or higher because last year’s steep drop in crude oil prices will start to be filtered out of the inflation equation. 

Also on-tap on Wednesday, November 18 are the minutes of the last Fed meeting. Hawkish minutes are likely to put some upward pressure on the USD/JPY because they will highlight the divergence between the monetary policies of the hawkish U.S. Federal Reserve and the Bank of Japan. The divergence will eventually sustain a long-term bullish outlook for the USD/JPY. 

Empire provides in-depth analysis for each currency and commodity we review. Fundamental analysis is provided in three components. We provide a detailed monthly analysis and forecast at the beginning of each month. Then we provide more recent analysis and information in our weekly reports.

Weekly USD/JPY
Weekly USD/JPY

Reports to Watch This Week: 

            Date                       Time              Curr                              Event                                                             Forecast  Previous

 

Sun Nov 15

All Day

ALL

 

G20 Meetings

         
 

 6:50pm ET

JPY

 

Prelim GDP q/q

   

-0.1%

-0.3%

 
   

JPY

 

Prelim GDP Price Index y/y

   

1.7%

1.5%

 

Mon Nov 16

8:30am ET

USD

 

Empire State Manufacturing Index

   

-5.3

-11.4

 

Tue Nov 17

8:30am ET

USD

 

CPI m/m

   

0.2%

-0.2%

 
   

USD

 

Core CPI m/m

   

0.2%

0.2%

 
 

9:15am ET

USD

 

Capacity Utilization Rate

   

77.5%

77.5%

 
   

USD

 

Industrial Production m/m

   

0.1%

-0.2%

 
 

17th-19th

USD

 

Mortgage Delinquencies

     

5.30%

 
 

10:00am ET

USD

 

NAHB Housing Market Index

   

64

64

 
 

4:00pm ET

USD

 

TIC Long-Term Purchases

     

20.4B

 

Wed Nov 18

8:00am ET

USD

 

FOMC Member Lockhart Speaks

         
 

8:30am ET

USD

 

Building Permits

   

1.15M

1.11M

 
   

USD

 

Housing Starts

   

1.16M

1.21M

 
 

10:30am ET

USD

 

Crude Oil Inventories

     

4.2M

 
 

2:00pm ET

USD

 

FOMC Meeting Minutes

         
 

6:50pm ET

JPY

 

Trade Balance

   

-0.38T

-0.36T

 
 

Tentative

JPY

 

Monetary Policy Statement

         
 

11:30pm ET

JPY

 

All Industries Activity m/m

   

0.2%

-0.2%

 

Thu Nov 19

Tentative

JPY

 

BOJ Press Conference

         
 

8:30am ET

USD

 

Unemployment Claims

   

272K

276K

 
 

10:00am ET

USD

 

Philly Fed Manufacturing Index

   

0.1

-4.5

 
   

USD

 

CB Leading Index m/m

   

0.5%

-0.2%

 
 

10:30am ET

USD

 

Natural Gas Storage

         
 

12:30pm ET

USD

 

FOMC Member Lockhart Speaks

         

Fri Nov 20

12:00am ET

JPY

 

BOJ Monthly Report

         

Sat Nov 21

12:00pm ET

USD

 

FOMC Member Williams Speaks

         

About the Author

James is a Florida-based technical analyst, market researcher, educator and trader with 35+ years of experience. He is an expert in the area of patterns, price and time analysis as it applies to futures, Forex, and stocks.

Did you find this article useful?

Advertisement